5 reasons to hire an external development team

10 min read
November 16, 2022

Have you ever heard of the Great Resignation?

It’s an ongoing phenomenon where employees are quitting their jobs en masse, due to low wages, unreasonable working hours, or simply the desire to try out new opportunities.

Unfortunately, IT professionals are not immune to this phenomenon, which has caused a shortage of developer talent worldwide and put software projects at risk.

If you’re worried about facing the costs and effort of hiring and onboarding a developer in-house only to find yourself in a similar situation, consider outsourcing to an external development team instead.

In this article, we’ll go through five more reasons why hiring an external dev team is the better alternative.

Having access to a larger talent pool

Hiring an external development team will give you access to a larger pool of skilled developers.

This is especially vital if you live in a country without a developed IT industry or are tackling a niche in which you have zero experience.

Fintech is a good example. Compared to other niches, a fintech app has certain unique requirements, such as blockchain and regulatory compliance.

top 10 skills in demand in the fintech industry

Source: Sitech

Thus, if you want to create a fintech app, you’d need to hire developers with the relevant expertise.

This can be expensive, however.

The cheaper alternative? Outsource the work to an external development team with fintech experience.

Another reason to consider hiring an external team is the current lack of IT talent.

As many as 82% of companies around the world find it hard to hire and retain top talent thanks to a shortage of qualified developers. It’s quickly becoming a crisis, resulting in worldwide losses of $390 billion.

skill shortage in IT 1

Source: Open as App

But the truth is that there’s actually no shortage—IT professionals have just chosen to relocate or work elsewhere.

And the best way to tap into that pool of talent is by outsourcing your development work to an external team.

You can hire these developers through nearshoring or offshoring.

Briefly, nearshoring is where you hire a development team in a neighboring country, ideally with a timezone difference of fewer than three hours.

The benefit of this is that language and cultural barriers tend to be minimal.

Offshoring is where you pick any developer from any country to work with.

It gives you the widest pool to choose from, although at the cost of having to deal with disparate time zones and cultural barriers.

Or, you can also opt to do multisourcing, where you divide the development work into several teams. Some are nearshored, while others are offshored.

multisourcing 1

Source: DECODE

And that’s the beauty of hiring externally. You have the freedom to build a team with the exact skills required for your project.

This is called a cross-functional team.

Let’s go back to our fintech app example.

To build your team, you might hire a financial law consultant from the United States, a blockchain expert from India, and a cybersecurity professional from the UK.

cross functional team infographic 1

Source: Entelect

The bottom line is that outsourcing an external development team evens the playing field. It gives you access to IT talent around the world.

Saving time on hiring developers

Outsourcing to an external development team is often faster than hiring developers in-house.

That’s because hiring permanent staff can be a time-consuming process.

On average, it takes around 40 days to hire in-house, according to Brainhub.

And do you know that the initial hiring tasks—like screening and interviewing candidates—take up the most time?

Check this out:

which steps take the most time in your hiring process chart 1

Source: People Hum

If the candidate rejects the job offer, you must repeat the process. All in all, this could easily double or triple your hiring time.

And that’s just the beginning. You also need to consider onboarding the employee to get them up to speed with your company’s workflow and standards.

This could take at least a month, according to a StackOverflow study.

Transparent evaluation chart

Source: DDI Dev

This time frame isn’t always ideal. Smaller companies might be on a tight project schedule, without weeks to spare just for sourcing developers.

In these cases, it’s better to outsource to an external development team.

Getting an external development team can take as little time as a week, especially if you already know your project requirements.

The process is also relatively straightforward.

You start with an initial consultation with the agency to discuss your project. Once you award the work, the agency will create a development team that’s 100% tailor-fit to your requirements.

Finally, you brief your new team, and they can start immediately.

dedicated team model process 1

Source: Uplers

The best thing is that an external development team is usually ready to work from day one.

The outsourcing agency will have already vetted the individual members of the team to ensure they have the relevant skills and experience for your project.

Thus, you won’t need to train or onboard them as much.

Overall, the external team model is the closest thing you can have to an instant hire button at your fingertips. It allows you to get the exact talent you need, when you need it, in record time.

Reducing the cost of development

Working with an external development team is a smart, cost-effective move.

That’s because hiring in-house isn’t just time-consuming— it could also be expensive.

We’ll give you an example. Say you got an in-house staff with a salary of $31,200 per year. You’d think that’s the only amount you’ll spend after hiring.

But in reality, that’s not the only cost you’ll incur. There are also taxes, insurance, bonuses, and incentives to worry about.

All in all, these hidden expenses could cost up to 32% more than the employee’s base wage:

How much does an employee cost infographic 1

Source: Patriot Software

It doesn’t end there.

According to the Society for Human Resource Management, you’ll need to spend an average of $4,100 to onboard a new employee to acceptable productivity levels.

Turnover is also a hidden expense that many business owners miss.

For instance, the estimated cost of replacing employees in a 100-person organization could be anywhere from $660,000 to $2.6 million annually.

Outsourcing to an external development team can help you lower all of those costs.

For one, developer rates are cheaper in other parts of the world. For instance, you can hire a developer from Croatia for around $20-$50 an hour.

Contrast those prices with a Western European developer, which can charge as high as $100 per hour.

developer prices across the world 1

Source: DECODE

And it’s not always true that you get what you pay for. Sometimes, you get more!

For instance, Croatian developers are just as good as their North American counterparts, despite charging less.

In fact, Croatia has the world’s best programming talent per capita, according to the International Olympiad in Informatics (IOI).

international Olympiad in informatics chart 1

Source: Medium

Second, you only pay for the work done by a development team and nothing more.

You don’t need to invest in equipment, infrastructure, rent, or training—because the team already has that covered.

Just make sure that the team supports the time and materials pricing model. This means you pay the team depending on the number of hours worked.

It’s a fair arrangement for both parties, especially with software projects with changing requirements.

Finally, you don’t need to worry about turnover costs. If an individual member drops out, the outsourcing agency will replace them at no extra charge.

Being able to scale the project

Are you looking to scale your app projects or handle a sudden surge in demand? Getting an external team is the best approach.

One of the biggest roadblocks to scaling a business is hiring new employees, especially for companies with fewer than ten employees.

roadblocks to scaling a business stats

Source: Visual Capitalist

The flexibility of an external development team helps you avoid this problem.

Instead of hiring new in-house staff, adding members to your existing core development team to match your current needs is far easier.

For example, you can hire a UI designer during the early and mid stages of development.

Then, as the design gets finalized, you can slowly ease them out of the project as they’re no longer needed.

The same is true with your QA team. Normally, they’re only needed toward the end of the development cycle, so keeping them on your payroll throughout is a huge waste.

dedicated team 1 1

Source: DECODE

The benefit of this flexibility is that you only pay for the required expertise, which can further lower your development costs.

That’s how the DECODE team works. We scale and charge accordingly, depending on the workforce needed for the project.

Contrast this with hiring in-house staff. Regardless of whether they work on an ongoing project or not, you still need to pay wages.

This means that, during off-peak times, when their workload isn’t full, you end up paying for idle time.

And according to the Harvard Business School, idle time could cost businesses $100 billion annually.

Scaling can be a difficult and expensive affair. But with an external development team, it could be more accessible.

Speeding up the time to market

Ultimately, an external development team brings speed to your project, helping you get your apps to market much faster.

This is an important advantage to have, considering that most apps take only six months of development time on average before launch.

To stay competitive, you need to complete your projects faster than that.

Average app development Time before launch 1

Source: Appinventiv

The problem is that most developers need around three to six months to become fully productive.

In some complex projects, this can extend to around a year! That’s simply not a feasible time frame to work on.

But external development teams help you eliminate this problem.

Most such teams already have experience working together. It’s also likely that they’ve already tackled a similar project in the past, minimizing the lag time required to become fully productive.

Chances are also good that external development teams already have the proper methodologies and systems in place.

For instance, DECODE adopts the Agile methodology for software development.

Agile methodology

Source: DECODE

Agile allows us to rapidly iterate through the planning, development, and testing stages. It enables us to launch a bug-free, quality app much faster.

Communication is another overlooked aspect of development that could contribute greatly to market speed.

An external dev team will already have established communication protocols, including the right tools to use for every situation.

This can help avoid confusion and lost messages, which could delay a project.

For instance, here’s the communication stack used at Doist.

communication stack used at Doist 1

Source: Twist

The bottom line is that external development teams bring experience and expertise to the table. That gives them the ability to deliver quality projects on time.

Ready to hire an external dev team?

We hope you’re convinced that hiring an external team is one of the best moves you could make for your app project. After all, the benefits are too hard to ignore.

Once you’ve decided, the next step is finding and hiring the ideal external team.

This is easier said than done, however. There are a dozen hiring mistakes you could make, especially if you’ve never done it before.

Unfortunately, the wrong team will cause you more harm than good!

To help you out, we’ve prepared a primer on how to hire an IT outsourcing company.

Good luck out there!

long white bg
Written by

Mario Zderic

Co-founder and CTO

Mario makes every project run smoothly. A firm believer that people are DECODE’s most vital resource, he naturally grew into the role of People Operations Manager. Now, his encyclopaedic knowledge of every DECODEr’s role, and his expertise in all things tech, powers him to manage his huge range of responsibilities as COO. Part developer, and seemingly part therapist, Mario is always calm under pressure, which helps to maintain the office’s stress-free vibe. In fact, sitting and thinking is his main hobby. What’s more Zen than that?

Related articles